PROVISIONAL Anti Dumping Duty was imposed on Pentaerythritol originating in, or exported from China PR and Sweden by Notification No. 93/2005–Customs, dated the 20th October 2005 valid up to 19th April 2006.

Definitive Anti Dumping Duty on the product was imposed by Notification No. 37/2006–Customs, dated the 20th April 2006 valid up to 19th October 2010.

This was extended up to 28th March 2011. Therefore, the notification expired on 29th March 2011.

On 25th March 2011, the Designated Authority has recommended that the quantum of anti dumping duty in force needs to be revised so far as China PR is concerned and needs to be discontinued from Sweden.

The Revenue Department took three more months to issue their notification and now a new notification is issued freshly imposing anti dumping duty on this product originating in or exported from China PR for a period of five years from 14th June 2011.

This time they have not gone for a resurrection.

But what about the period from 29th March to 13th June 2011? Was there no dumping from China during this period? But the Designated Authority had on 25th March 2011 recommended the duty! Who is responsible for the dumping and loss that took place during those 75 days?

Many Customs officers are furious with DDT for its caustic remarks on resurrection of dead anti dumping notifications. “Why don't you blame the Designated Authority, who always gives the recommendation at the last moment or after a notification has expired?”, they ask me. The question is not who is to blame, but why resurrection at all? Government should speak in one voice to the stakeholders and inter-departmental rivalry should not cause harassment to the taxpayer and loss of revenue to the Government.

Notification No. 47/2011-Customs, Dated : June 14, 2011

Write-off of arrears - Committees to be constituted

DDT 868 19-05-2008 had reported an interesting conversation on arrears.

A young Deputy Commissioner was forcefully telling his Commissioner that the arrears are not recoverable and should be written off. The Commissioner wanted to show the arrears under “persuasive action”. The Deputy Commissioner said no amount of persuasion can recover the arrears and why can't the Commissioner write off the arrears. The Commissioner told the young Deputy Commissioner, “you will understand why I can't write off the arrears only when you become a Commissioner; for now show them under persuasive arrears .

Individually no officer in the Department would like to write off arrears for fear of Vigilance perhaps, even though they know that the arrears cannot be recovered.

It is believed that as a group, the bureaucrats can take decisions, which they cannot take individually – maybe there should always be someone else to blame. But even the Committee system has thoroughly failed in the CBEC as has been conclusively proved in the Committees on Appeals. These committees never meet; one Chief Commissioner/Commissioner takes a decision and the file is sent to the other Committee Member who accepts the recommendation and then it becomes the decision of the Committee! Sometimes, a single Member acts as a Committee, mocking the very definition of a Committee.

Anyway, now the CBEC has decided to constitute three member committees to consider writing off arrears of Customs and Central Excise. The Chief Commissioner's Committee will constitute three Chief Commissioners with Chief Commissioner (TAR) being an ex-officio Member. Similarly, the Committee of Commissioners will consist of two Commissioners, with a Commissioner (TAR) as ex-officio Member. The Chief Commissioners' Committee can write off arrears up to Rs. 15 Lakhs and the Commissioners' can write off Rs. 10 Lakhs.

Should three Chief Commissioners meet to write off a small amount of Rs. 15 Lakhs? Their travel and other expenditure will be about Rs. 5 Lakhs and if they meet thrice to decide an issue, the Government will be spending 15 lakhs to write off 15 lakhs. A Commissioner can drop a demand of Rs. 500 Crores or even more, but three Commissioners together cannot write off Rs. 11 Lakhs! Maybe, after some time we can create a few more posts of Chief Commissioners and Commissioners exclusively for this work.

Committee: A group of important persons who individually can do nothing, but as a group can decide that nothing can be done.

CBEC Circular No. 946/07/2011 CX.,Dated: June 1, 2011

Tariff Value reduced for Brass Scrap and Poppy seeds

GOVERNMENT has reduced the tariff values of Brass Scrap (all grades) from USD 4346 to USD 4323. Tariff value of poppy seeds remains at 2520 USD. There is no change in the value of other items also.

Notification No. 38/2011-CUS (N.T.), Dated : June 15, 2011

Advocates can practise in all courts

NOW Advocates can, as a matter of right, practise in all courts, tribunals and authorities.

Section 30 of the Advocates Act, 1961 reads as,

“Subject to the provisions of this Act, every advocate whose name is entered in the State roll shall be entitled as of right to practise throughout the territories to which this Act extends,-

++ in all courts including the Supreme Court;

++ before any tribunal or person legally authorised to take evidence; and

++ before any other authority or person before whom such advocate is by or under any law for the time being in force entitled to practise. ”

For some strange reason, this Section was not notified for the last fifty years. The Government has issued a notification last week appointing June 15 2011 as the date from which this section will come into force.

Merge CBDT and CBEC?

IT seems the Union Law Minister Veerappa Moily has suggested to the Finance Minister to merge the CBEC and CBDT to tackle black money effectively. He has cited the example of UK where the Direct and Indirect Taxes Departments were merged into Her Majesty's Revenue and Customs (HMRC). Moily feels that a unified department to cover both direct and indirect taxes would provide enormous information advantages on a single business across various taxes that they pay. This would make tax administration more information based as cross-information is not available when two departments are separate.

Recovery Proceedings even after Stay by Tribunal - ITAT awards Costs

AN overzealous Income Tax officer attached the bank accounts of a co-operative society, in spite of a stay by the Tribunal. He had to meet his Revenue targets!.

The ITAT observed, “the events in the present case are sufficient to make us of the belief that the appellant a Credit Co-operative Society dealing only with its members has been unnecessarily subjected to the harassment caused by the actions of the authorities below which were not warranted under the facts and circumstances of the present case.”

So, the Tribunal awarded a cost of Rs. 5000/- to be paid to the appellant Credit Society.

Please see 2011-TIOL-347-ITAT-PUNE

Can Tribunal refer to a case not cited at time of hearing?

THE Delhi High Court held that it could. The High Court observed, “ It is not unusual or abnormal for Judges or adjudicators to refer and rely upon judgments/decisions after making their own research.”

Please see 2011-TIOL-370-HC-DEL-IT

Jurisprudentiol – Friday's cases

Service Tax

Tennis club providing services such as health club, organizing tennis matches by renting ground, renting place for party purpose, organizing tournaments etc. - merely because they are a registered as a Charitable Trust cannot absolve them of Service Tax liability: CESTAT

THE appellant is a non-profit organization registered under Bombay Public Trust Act and is engaged in providing service of health club/sports activities to its members . The services provided by the appellants are clearly covered by the definition of the taxable services under Section 65(25)(a). - ¶Club or association¶.

Income Tax

Sec 37(1) - Whether, even in absence of a written agreement to join back firm, expenditure incurred on higher education abroad of grandson of one of firm's partners working there as apprentice can be claimed as business expenditure - NO: ITAT

ASSESSEE firm, having five partners, is engaged in the business of export of durries, curtains, rugs, made-ups etc. The assessee firm incurred expenses towards the education of the grandson of one of the partners of the assessee firm on behalf of a HUF for pursuing Master's Degree in Strategic Marketing from De Mont Fort University, U.K. AO disallowed the said expenses stating that the expenses were incurred for providing education to the grandson of a partner and these expenses were not incurred for the purpose of business. The CIT(A) confirmed the addition.

Central Excise

CESTAT recommends disciplinary action against adjudicating authority – contemptuous approach on part of Commissioner - on remand, he had no business to observe that he was in full agreement with reasoning given by his predecessor – earlier order is not in existence in the eyes of law once it was set aside by Tribunal: CESTAT

IT is seen that the Commissioner totally forgot that he had to carry out the directions as per the Tribunal's order, it virtually tried to sit in appeal over the order of the Tribunal. It clearly discloses contemptuous approach on the part of the Commissioner. Once the Tribunal has held that the reasonings given by the Commissioner for arriving at the quantification were not acceptable, the Commissioner, on remand, had no business to observe that he was in full agreement with the reasonings given by his predecessor. The order passed by the predecessor was not in existence in the eyes of law once it was set aside by the Tribunal. Besides to say that he was fully in agreement with the reasoning of an order which has been set aside by the higher authority is certainly an act of insubordination. Commissioner of Central Excise, Mumbai III, while passing the above order should have borne in mind that he was dealing with a matter on remand by the Tribunal which is higher authority to him and, therefore, he should not have decided the matter in the manner he has decided the same. The manner in which the matter has been decided certainly calls for disciplinary action against such authority.

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Day.

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